What I understand is, bank wont release the money to them till they sell certain % of houses - for example 30%. To get the initial 30% of buyers, they need to spend their money to build something to secure the buyers. That is probably the risk they are taking.

Our RM is depreciating fast.

If u have ample cash, should seriously look for currently under-valued property.

Riuken,

But, they get certain amount of down payment from the house buyer when they sell without building ANYTHING other than model house.

Most of the risk is with house buyer and bank.

Dreamer

i am not sure if you're in the business but i have a friend who's in the business himself and his company actually completed a few small housing project at mainland penang...so i think i can trust what he say unless he has intention to bluff me la... ...so i think they still have risk as well to lose their money.... that's what he told me... if he bluff me...too bad la...doesn't matter to me...

if all risk bear by buyer and bank, then everyone might as well jump into construction business? sure win ma....


This post has been edited by kevyeoh: Jul 10 2008, 09:34 AM

kevyeoh,

1) You need the connection to get approval in order to be developer.

2) Yes, he bear some risk but it is not as large as you think.

"Trust but verify"

3) You can do YOUR OWN critical thinking to figure out whether he is telling you the TRUTH.

4) Ask him when he actually put in his own money?? Only a small developer that CANNOT get loan from the bank has to bear larger portion of the risk.

Dreamer

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Added on July 10, 2008, 9:56 amkevyeoh,

1) You need the connection to get approval in order to be developer.

2) Yes, he bear some risk but it is not as large as you think.

"Trust but verify"

3) You can do YOUR OWN critical thinking to figure out whether he is telling you the TRUTH.

4) Ask him when he actually put in his own money?? Only a small developer that CANNOT get loan from the bank has to bear larger portion of the risk.

Dreamer

This post has been edited by dreamer101: Jul 10 2008, 09:56 AM

bro...
that time casual talk la... don't drill until super detail and think a lot not to trust my friend...

but he did tell me he still need to invest a few hundred thousands also la... so at times, he cannot sleep worry cause sometimes the gov paperwork take a long time... so it's delaying his project....because u only earn when you sell the house and complete...if the project take a long time...u won't earn anything yet....

i'm just saying what i was told from a friend who's in the business... that's all... and my own critical thinking tells me that it sounds quite true he will need to dump in money himself... maybe to you a few hundred thousand is not a lot so that is not consider high risk... to me...sounds like a lot of money...

ok... nothing more to discuss... i'm just informing here what i know...maybe wrong info also...

i'm out...later become a flame thread and i sound like a retard without critical thinking.... chao....

Yeah, I agree. Or other forms of investment.

I am not sure property is the way to go.

@Scorgio,

What does RM depreciation got to do with properties?

And, when u say depreciate, it depreciates against what lah?

This post has been edited by Pai: Jul 11 2008, 09:01 AM

Well, what I meant was, the value of our money is shrinking fast.

So putting money into property, will at least retain the value. Heck even buying a solitaire, or gold bar suffice.

At the current rate, 10-20 years later, a person holding a manager's post (salary RM6-8k range) may not even afford a link house in Subang Jaya, Petaling Jaya etc. This view was brought up by a consultant during one of our meetings and agreed by all attendants (mostly high ranked officers of a developer).

if even manager cannot afford to buy a link house, who will be staying there? if there is no demand how can the price keep going up?

Somehow, sometimes, whatever theory on asset management & ROI can't be applied to property.

Hi,

Im also thinking of buying a new house. It should be below 200k most probably. Where should be the best location in KL area or cheras?
Im glad if there is any input.

Thanks for the future feedback.

I see, and I use to describe the scenario as declining purchasing power instead of currency depreciation.

Totally agreed on the gold and property theory, but aint sure about the solitaire idea though

Ya like the people in swiss, all rent houses because they cannot afford the prices eventho they earn tonnes. Most houses are owned by businesses.

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Added on July 12, 2008, 2:43 amcheras below 200k....hard to find oredi. Maybe further south.

This post has been edited by mIssfROGY: Jul 12 2008, 02:43 AM

Further south, how about ampang area? any recommendation?

========

agree...declining purchasing power is the more accurate term...

but property is a general term, in my opinion, apartment does not guarantee on long term that it will protect the value of your money.... but for landed, yes...
i don't know about KL...but lets say in Penang, i think the price of apartment has already been stagnant for the past 5 yrs and it won't go up anytime soon because there's oversupply...

Very good observation, and couldnt agree more.

KL is not too diff, except that nowadays with current new launches are going at ridiculous levels, the older condo and apartments starts showing upwards capital gains.

You could got spectacular returns from landed props, but you must haveholding power of min 10 years before u'll gain substancially. Your rental income from landed in the meantime sucks big time, not enough to even cover our installment. Hence why I always opt highrise investment, while I might not get 1000% return after say 10 years, I'll get minimum 300% returns after 5 years and some handsome monthly pocket $$$$ as a passive income.

ampang? Ampang is so near town, dun think u can even get below 300k. But not too sure about inner ampang la....but if u r referring to props nearer to town, i dun think so.

setapak quite ok what. naer to town and some of the houses still underpriced. hahahaha the only few overpriced housing are those area where no students go

ya bro pai...

generally.... i think if you want return via passive income, then you can consider apartment....earn from the rental there...if your rent is higher than the interest rate...then that's the income...

for landed...it's capital appreciation... a RM600k house over here is rented out at most for RM900 or RM1k... means RM12k for RM600k return p.a... definitely sucks big time...


so i think our idea is about the same...just a matter of which jalan you choose wanna go....
i just can't decide now which way i'm going... the rental or the capital appreciation route... kekeke.... but most likely if i can afford...i'll go for landed first....


This post has been edited by kevyeoh: Jul 12 2008, 05:38 PM